Read Lord Mandelson's speech from this morning's job summit at the Science Museum, London...
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swiss-image.ch/Photo by Remy Steinegger
“As Business Secretary, my job is to help deliver real help for viable businesses to get them through the recession. We are doing that and further support measures will be set out later this week.
But the government’s job is also to look to the longer term. What we do today must also lay the foundations for future economic strength.
So, the first question for a long term take on the UK labour market has to be – what kind of British economy is going to emerge from the current downturn?
It’s of course impossible to say with precision. But we know a few things.
We know, for example, that the UK is almost certainly going to emerge from this downturn with a consolidated financial services sector.
The British consumer is going to be minding their money a little more carefully, so retail will probably grow more slowly than the rest of the economy.
After a decade of badly needed investment that has strengthened many parts of the public sector, public sector job creation will not grow at anything like the same rate.
So this raises a big question. Where are the jobs going to come from?
Well, I’ve spent the last two months arguing that above all they need to come from a renaissance in UK manufacturing and the expansion of the UK’s knowledge-based industries.
Of course, our strengths in service industries, for example professional and business support services, will grow. Every part of the UK economy matters and government policy must address all of them. But to get a sense of the scale of some of the potential opportunities it is interesting to look at a sector like the low carbon industry. I offer this as an example.
The global market for low carbon and environmental goods and services is currently worth about £3 trillion, and it is projected to grow strongly over the next decade as both the developed and the emerging world makes the shift to low carbon or post-carbon.
There are over 800,000 people in the UK employed in this sector once you factor in the supply chain. Many of them are employed in renewable energy industries, but around half are employed in emerging low-carbon areas such as alternative fuels and low carbon design and development. There are also tens of thousands of people employed in services industries like environmental consultancy and carbon finance. So this is a job revolution that cuts right across all sectors of the economy.
The UK’s environmental goods and services sector is the sixth biggest globally and is projected to grow substantially over the next decade. If the UK takes advantage of the opportunities available and realizes this growth, we could see over a million jobs in this sector by the middle of the next decade.
But it is an if. Because this is going to be a fearsomely competitive sector. To get there we will need a smart, strategic approach from government that makes sure that the business environment is absolutely fine tuned to that outcome – and that includes using things like government procurement strategies to help companies willing to take the leap to develop the expertise that will make them global leaders.
That means government that ensures that we are developing the right skills base and investing strategically in the right research commercialization and process innovation.
When we launch proposals for the government’s low carbon industrial strategy in a few weeks time, it will include commitments to doing all this and more.
The key is to put in place the right frameworks of public policy within which private sector decisions are taken. To align the range of government policies to help secure the industrial objectives we are seeking.
There are analogies for what we want to do in government for low carbon industrial development in other areas. Digital infrastructure and the creative and knowledge industries – the work Stephen Carter is doing to create a fully digital Britain.
Bioscience. Precision engineering and advanced electronic manufacturing. And, as I have said, the world class services sector that these industries need to be embedded in.
Essentially we are talking about an industrial strategy that is rooted in the diversification of the UK economy and the deepening of its specialisms – where its comparative advantages lay in a changing global economy.
China and India and the rest of the emerging world, not to mention an increasingly competitive European single market, are going to keep pushing us to refine and renew what we do best.
But that competitive global economy will also be twice the size it is now, and give us access to a global middle class that will number a billion by the end of the next decade
So we can’t know the future precisely and we shouldn’t be trying to anoint British success stories in advance – that kind of prescription is pretty much a recipe for what you might call a ‘Betamax economy’.
But we do know broadly what we will need to be good at, and that is being smarter and more innovative and creative and more flexible and adaptive and confident and entrepreneurial than the competition. Because that is where more and better jobs will come from.
The task for government and the private sector now is making sure we get there. No one is trying to order change or run industries from Whitehall. That’s not the sort of industrial activism I have in mind. But to identify and pursue the government policies that will support the private sector and draw the benefits from markets to get the jobs of the future we want.
This is no simple challenge but one, I am sure, the following panel will be able to shed light on.”
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